Condo tenants in Makati and Ortigas, and all the way to the Fort, may get a breather in the coming year.
Collier’s, an international real estate consulting firm, says that the oversupply of condos for rent, as well as those being built, have created a glut of rentals.
Not only have the prices turned many renters away, but the onslaught of construction has outstripped demand, creating a massive backlog of empty units in some of the highest rent districts in the Philippines.
Collier’s said that about 13,400 condos are expected to be added to the Manila skyline in 2016.
This will create what Colliers notes as a “downward correction” in rental rates.
The real estate firm said the correction could be as much as ten per cent.
Adding the glut of condo construction, an estimated 60,000 apartments are being added to the swelling numbers of empty and partially empty construction projects.
Collier’s said that a defensive move by some of the biggest development crews may see them shifting to more affordable projects in regions outside major cities.
Overpricing in the Manila market can be seen in rates of other local areas outside of the Philippines – Manila averages just over $25 (USD) per square foot for leases in office complexes – while Kuala Lumpur falls in at around $19 per square foot and Seoul, Korea at $22 per square foot.